Saudi energy firm Alfanar looking to sell half its Indian wind power assets

A man grazes a herd of goats near a wind turbine manufactured by Inox Wind Ltd. operating near electricity pylons at the Ostro Energy Pvt. Lahori Wind Farm in Lahori, Madhya Pradesh, India, on Monday, Aug. 14, 2017. Photographer: Dhiraj Singh/Bloomberg

Saudi Arabia’s Alfanar Group is looking to sell half of its 600 megawatt (MW) wind power projects in India in what is likely to rank among the largest wind energy deals in India, two people aware of the development said.

With India lifting many of the curbs on businesses following a strict two-month lockdown, deal activity is gaining pace in the country’s green economy. Power demand is also slowly returning to pre-lockdown levels after having nosedived as factories, malls and offices were shut for the past two months.

Alfanar has tasked JM Financial to find a buyer, one of the two people cited above said on condition of anonymity. The person did not disclose the estimated size of the deal.

Riyadh-based Alfanar Group has a clean energy portfolio of 1.4 gigawatts (GW) in West Asia, Africa, Europe and Asia. In India, Alfanar has a wind project portfolio of around 600MW that it won in auctions conducted by state-run Solar Energy Corp. of India (SECI). It quoted 2.45 per per kilowatt-hour (kWh) and 2.77 per kWh in February 2018 and October 2018, respectively, to win the bids for developing 300MW each of wind projects.

Queries emailed to Alfanar Group and JM Financial remained unanswered till press time.

India is running the world’s largest clean energy programme, with an aim of having 175 gigawatts (GW) of clean energy capacity by 2022. The country now has 38GW of wind power and plans to add 6 GW of wind capacity by March 2022.

Some of the marquee global investors in India’s clean energy space include Masdar, also known as Abu Dhabi Future Energy Co., Goldman Sachs, Brookfield, SoftBank, Canada Pension Plan Investment Board, Japan’s JERA Co., Singapore’s GIC Holdings Pte Ltd, Global Infrastructure Partners, CDC Group Plc and International Finance Corp.

India’s wind energy sector has been facing headwinds as banks are wary of lending to developers as they suspect the viability of projects that have agreed to sell power at rock-bottom tariffs. There are also issues regarding delay in payments by state-run power distribution companies (discoms), non-allocation of land to wind power projects, besides transmission and connectivity-related challenges.

Seized of the issue, the government has announced a reform-linked 90,000 crore bailout package for fund-starved discoms, along with concessional tariffs that is aimed at helping clear dues of project developers.

“This move will benefit all power companies, including central public sector enterprise gencos and transmission companies, independent power producers and renewable generators,” India Ratings and Research wrote in a report on Monday.

“The dues clearance, which has remained a key monitorable for all gencos, would be a positive step. However, Ind-Ra believes that unless there are structural reforms in the power distribution segment, the problem of mounting dues could become perennial and the current relief would be temporary,” the report added.

The article was first published on livemint.com

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.